[hsk]

That's not the right way to look at it.

People invest in an IPO in the first place because of the promise of liquidity down the line.

If investors were told that they couldn't freely buy or sell shares after the first time it is sold, the IPO is going to do far worse.

The ability to trade the stock around directly helps the company by making the IPO more successful.

That's not even considering that the company could issue secondary offerings.

[OscarCunningham]

So if I invest in Facebook now, I'm helping them by making it easier for them to raise money several years ago? In some kind of weird acausal way, because people then anticipated my actions now?

[ncallaway]

> In some kind of weird acausal way, because people then anticipated my actions now?

They didn't anticipate _your individual_ actions, but it's highly likely that the persons that bought into Facebook's IPO did expect that they would be able to sell the stock to _someone_ at a later date.

So, yes, people anticipated your actions now (if you look at _your_ actions as the general actions of the crowd, instead of your individual actions)

[gnode]

If you invest in a stock with the intention of selling it later, rather than holding it forever to earn the dividends, your decision was motivated by the expectation that there will be a market for it in the future.

By buying Facebook stock now, you're fulfilling that expectation of earlier investors, which motivated them to provide Facebook's initial funds.

[tome]

No, you're helping pre-IPO companies raise money now.